As Medicare Fraud Evolves, Vigilance Is Required

DEBORAH GILMAN, 44, a nurse who lives in Newark, Calif., knows that Medicare fraud is out there. But she never thought her father, Jerry Gilman, 68, would become a victim.

Mr. Gilman, a Vietnam veteran, has peripheral neuropathy and other complications from exposure to Agent Orange, his daughter said. He is also the primary caretaker for his wife, who has Alzheimer’s disease and recently had a stroke.

“My dad was frequently dizzy and falling and generally having trouble getting around,” Ms. Gilman said. So last February, father and daughter decided it was time for a motorized chair.

With the approval of his doctor and Medicare, Mr. Gilman ordered a power chair from Hoveround. When the chair arrived, Mr. Gilman realized quickly that it was not the model he had requested: it was made by a different manufacturer, and it was much smaller and less sturdy. “I was worried if he used that chair, he’d tip over and really get hurt,” Ms. Gilman said.

She reported the error to Hoveround and Medicare, but hands were tied all around. Medicare had already put payment through for the wrong chair. Until that order was cleared up, Hoveround could not send a new chair and expect Medicare to pay for it.

Frustrated, Ms. Gilman then sought help from her local Senior Medicare Patrol, part of a federally financed antifraud program. After weeks of sleuthing, they determined that Mr. Gilman’s order for the Hoveround chair had been intercepted by someone who then ordered and billed for the erroneous chair.

Debra Silvers, vice president of corporate compliance at Hoveround, agreed that something like that must have happened, but declined to affix blame, surmising only that "someone in Mr. Gilman’s doctor’s office must have ordered the chair from the other manufacturer.”

But with the patrol’s help, Ms. Gilman was able to stop the Medicare payment to the wrong manufacturer, and Mr. Gilman had the correct chair by April.

Medicare abuse and fraud like this costs taxpayers tens of billions of dollars every year. The Centers for Medicare and Medicaid Services, or C.M.S., estimated that in 2010, the two programs together made more than $65 billion in improper federal payments. An April 2012 study by a RAND Corporation analyst and former C.M.S. administrator estimated that fraud and abuse cost Medicare and Medicaid as much as $98 billion in 2011.

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In addition to the cost, Medicare fraud can jeopardize patients’ health. Mr. Gilman, for instance, could have been stuck with an inappropriate and potentially dangerous motorized chair. In other cases, patients cannot get the care they need because fraudulent charges have exhausted their allotment of Medicare benefits.

Blanca Reese, program manager for Kern County Aging and Adult Services in California, recalled a recent case in which a woman reported that her doctor refused to see her because Medicare had flagged her number for overuse. “Turns out thieves had gotten hold of her Medicare number and provider information and had fraudulently billed her doctor’s office for 40 visits in one day,” Ms. Reese said.

Officials are also noticing a huge increase in problems in the home health care and hospice areas. For instance, some Medicare recipients are persuaded to sign up for “free” massages in their homes, and Medicare is fraudulently billed for physical therapy. Or, unscrupulous doctors approve patients for hospice care who are not terminally ill and may be experiencing something as minor as recent weight loss.

“These cases are the ones that really break my heart,” said Julie Schoen, director of California’s Senior Medicare Patrol, the office that helped the Gilmans. “Fraud like this causes Medicare to crack down on hospice benefits, and patients who really need the care can’t get it.”

Then there are more subtle abuses, the ones to which younger Medicare recipients may find themselves vulnerable. A patient with a mild case of high blood pressure, for instance, may be persuaded to undergo a battery of heart disease tests that are covered by Medicare but are not necessarily appropriate. “Patients shouldn’t feel pressured into unnecessary tests or treatments,” said Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association, an advocacy group of insurers, law enforcement and regulatory agencies.

More commonly, doctors and other health care providers sign off on Medicare bills with little scrutiny. In other cases, busy doctors and their staff may approve requests for medical equipment and supplies without checking with the patient.

The Obama administration has vowed to fight Medicare fraud and abuse. Included in the Affordable Care Act are provisions for more coordinated law enforcement actions; increased standards for medical providers, particularly in the medical equipment and supplies area; and the use of high-tech tools to better identify erroneous and fraudulent billing patterns.

The Centers for Medicare and Medicaid Services reported that $4.1 billion was recovered in 2011, a record amount for a single year. But despite the progress, Ms. Schoen said, government and law enforcement agencies have a long way to go before they can catch up with the rampant abuse schemes.

A version of this article appears in print on September 12, 2012, on Page F7 of the New York edition with the headline: Medicare Fraud: Evolving Scourge Requiring Vigilance. Order Reprints|Today's Paper|Subscribe